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On September 1st, Royal Canadian Securities analyst Abbas Keshwani commented that given the yens weakness, the Bank of Japan (BOJ) may raise interest rates or intervene in the foreign exchange market in the coming weeks. The yen has weakened over the past month, and recent depreciation has already offset much of the BOJs intervention efforts over the past few months. Keshwani stated that for the yen to appreciate significantly, the BOJ would need to adopt an aggressive rate hike cycle, but it is unlikely to do so at the expense of economic growth. He added, "The BOJ may raise interest rates to a level sufficient to prevent the yen from weakening excessively until the Japanese government bond market stabilizes next year, thus creating conditions for a yen recovery."On September 1st, BCA Research analyst Felix Wezina-Poirier stated in a report that volatility in government bond yields is expected to be a significant factor influencing risk asset prices. Sovereign bond yields have risen to multi-year highs due to inflation concerns triggered by high oil prices. Wezina-Poirier stated, "For equities, the absolute level of yields is less important than the speed of change; therefore, implied interest rate volatility is a more useful indicator for measuring equity market risk." However, Federal Reserve Chairman Warshs remarks last week signaled a readiness to take action to curb inflation, which should help keep yield volatility at a relatively controlled level.September 1st news: Voyah Automobile delivered 13,003 vehicles in August 2026, and a total of 102,456 vehicles from January to August 2026, representing a year-on-year increase of 25%.Micron Technology (MU.O) shares fell 1.5% in pre-market trading.Both WTI and Brent crude oil rose by $0.60 in the short term, currently trading at $86.28 per barrel and $91.44 per barrel respectively.

Crypto winter may temper fintech earnings

Jimmy Khan

Aug 04, 2022 14:41

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Wall Street has lowered earnings expectations for once high-flying fintechs Coinbase and Block, as a chill in the cryptocurrency market adds more pain to the companies already grappling with surging costs and rapidly rising rates.


Crypto exchange Coinbase is expected to report an adjusted loss in the second quarter, while Jack Dorsey-led payments company Block is likely to post a 70% drop in adjusted profit.


Coinbase, which has the biggest exposure to crypto volatility, has lost more than three quarters of its market capitalization this year.


“For Coinbase, this is going to be a very difficult 12 to 18 months,” said Dan Dolev, senior analyst, fintech equity research at Mizuho Securities USA.


Block, which changed its name from Square last year to better reflect its focus on blockchain, has lost over half of its market value amid the stock market rout this year.

The context

The cryptocurrency selloff has dragged down multiple companies in the sector, with some even seeking bankruptcy protection. Bitcoin, the largest cryptocurrency, has nearly halved in value in the first seven months of the year.


“There could be potential for double digit headcount reduction (at Coinbase) at some point because the cost is too high,” Dolev said.


Estimate cuts and competitive pressures are also contributing to the weakness in fintech stocks, according to Credit Suisse analysts.


The cryptocurrency sector may be slowly emerging from a bruising selloff, but they still have to contend with regulatory hurdles in the United States, the biggest market for such assets.


Online trading app Robinhood Markets Inc reported a 44% plunge in second-quarter earnings on Tuesday, a day earlier than expected, and said it would also cut 23% of its workforce.

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